INTRODUCTIONThis study explores the motivation and rationale of cost and management accounting change in two Finnish university hospitals. More specifically, the management accounting change studied is the implementation and the adoption of activity-based costing systems, and how these systems, as well as the motivation to implement them, have changed over time. A new cost accounting system is implemented, i.e. an idea is conceived, a project is started and solutions are found. The initiative for the implementation may be intraorganisational or extra-organisational, and the motivation and rationale a combination of economic argumentation and institutional pressure. The actual benefits gained by the adoption of a new costing system will most probably be intangible and non-quantifiable in both industrial and non-profit settings. More properly, the benefits of adopting ABC are seen to relate to the belief systems of organisational actors. Therefore, it may not always be a fruitful approach to study the actual benefits of adopting ABC, but of the belief systems related to the benefits.Speciality health care in Finland is tax-financed. Hospitals are organised in hospital districts, owned by municipalities. A public university hospital finances its operations through patient fees, state subsidies for education and research, and the per-case reimbursement from the municipalities referring the patient (see Figure 1). The municipalities purchase speciality health care through the managed care mechanism, which is also intended to align the municipal speciality health care spending budgets to the hospital district budgets, so as to synchronise the demand and production of speciality health care services. This does not mean that the sum of the health care spending in municipal budgets equals the hospital district's sales budgets, since municipalities may purchase
The purpose of this paper is to study the institutional logics of how and why two case units in the Finnish Defence Forces have reacted differently to external pressures originating from the State Audit Office to change their management accounting systems. The situation is made complex due to the fact that in military organisations, accountants' tasks have traditionally consisted of bookkeeping and financial reporting, while management accounting tasks especially (e.g. planning and control) have been performed predominantly by military personnel, who can be called hybrid accountants. The data for this study consists of project memos and interviews with people involved in designing and implementing enterprise-resource-planning (ERP)-linked cost accounting and reporting systems. In the case unit where management accounting and control had become institutionalised as a part of the uniformed officer's professional sphere, various resistance strategies (i.e. compromise strategy/pacifying tactics, avoidance strategy/buffering tactics and defiance strategy/dismissing tactics) were adopted. However, where this was not the case, the response was acquiescence. Despite the differences in responses to institutional pressure, the outcome for management accounting was the same. In the first case, demands for change were resisted, and in the second case, the old management accounting system was transferred into new information and communication technology (ICT) infrastructure without any significant change in content.
The managed care system is a provider-purchaser model, in which the hospitals sell their output at a predetermined price to public sector purchasers. The purpose of contract-based budgeting (CBB) is to control the flow of resources in this system so that what is budgeted as revenue in the hospitals is budgeted as an expense in the municipalities. This study explores the process of how budgetary bias prevails in municipal and hospital district budgets despite the introduction of CBB. The data, which consists of budgetary documents and interviews, is informed by the framework by Burns and Scapens (Management Accounting Research, 11(1), pp. 3-25, 2000). The results obtained indicate that the changes in budgeting practices were not revolutionary, but incorporated the prevailing institutionalised practices into new ones. It also appears that the municipal frame budgets, conservative revenue estimation and the strict requirements for budgetary balance have a great potential to resist demands of change originating from outside.
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